Client Advisory: Panama Canal Update – August 28
What's the latest
Late last week the Panama Canal Authority announced an extension to restrictions it had put into place earlier this month as a result of an unprecedented drought in the region. For at least the next 10 months, the Canal Authority will continue to impose surcharges and weight limits on ships traversing the waterway, as well as reduce the average daily number of ships allowed to navigate the canal to 32 ships.
The Bigger Picture
When first announced on August 8, restrictions were supposed to stay in effect through August 21. However, this year’s severe drought conditions, combined with a looming El Nino weather pattern, are continuing to cause challenges at the canal, forcing the extension. At the time of the initial announcement, the Canal Authority had shaved around two meters off its maximum draft for its Neopanamax locks, which had resulted in the restrictions.
While waiting times have decreased slightly since earlier in August, according to the Waterfront Maritime Services, supply chains for goods frequently transported through the canal are expected to continue to be significantly slowed. This will continue to affect trade between China, Japan, South Korea, and certain regions of the U.S., in particular, as the Panama Canal facilitates 46% of container movement from north-eastern Asia to the U.S.
Vessels in Queue for Transit in the Panama Canal
|Vessels in Queue for Transit||49||66|
Waiting Time Forecast
|VESSEL TYPE||NORTH BOUND||SOUTH BOUND|
|NeoPanamax||8-9 Days||2-3 Days|
|Panamax Plus||0-1 Days||0-1 Days|
|Regulars||9-10 Days||1-2 Days|
*Source: Waterfront Maritime Services Panama Canal Waiting Times (Aug. 24, 2023)
The bottom line
We are continuing to monitor the situation closely and provide timely updates to those impacted. If you have any specific questions about your shipments, contact your SEKO representative directly.
We are your logistics partner, ready and able to pivot quickly in the face of challenging climatic circumstances. As the delays persist, our team is prepared to help find alternative routes (e.g., West Coast or Suez Canal re-routes, depending on the point of origin), where necessary and create a solution that works for your business and your customers.
If you have questions, please reach out to your SEKO representative, or email us at email@example.com.
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